Does Income Inequality Threaten Opportunity?

Today, on the Left and on the Right, everyone talks about rebuilding, saving, restoring, defending, or rescuing an American Dream that is slipping, fading, eroding, or vanishing.

The loudest voices, all coming from the Left, fulminate against the top 1 percent of earners and blame an unfair system that allows the rich to line their pockets, leaves the poor in the lurch, and generates spectacular income disparities. To protect the American Dream, these critics call for greater government involvement to make things more equal and ensure that everyone gets their “fair share.”

This gets both the problem and its solution all wrong. Free-market economics is not about dividing up a dwindling pie, but expanding the pie to serve everyone. Those who succeed do not do so at the expense of others.

Those who focus on income inequality have embraced a very different American Dream from the one that is familiar to most Americans. They still use the traditional language of opportunity, but their new dream has very little in common with the real American Dream.